ENERGY ADVISOR a WEEKLY PUBLICATION of the DIALOGUE April 13, 2018

LATIN AMERICA ADVISOR ENERGY ADVISOR A WEEKLY PUBLICATION OF THE DIALOGUE www.thedialogue.org April 13, 2018

BOARD OF ADVISORS FEATURED Q&A TOP NEWS Nigel Blackaby Global Head, OIL & GAS International Arbitration Group, Freshfi elds Bruckhaus Deringer Does Uruguay’s Guyana Has Been Mary Rose Brusewitz Too Generous Partner, Strasburger & Price ANCAP Have Deep With Early Oil Jeffrey Davidow Investors: IMF Senior Counselor, The Cohen Group Corruption Issues? One of the investors cited by the IMF, ExxonMobil, asserted that the Ramón Espinasa Consultant, terms of the deal is normal for a Inter-American Development Bank new oil play, saying “governments Luis Giusti need to incentivize companies to Senior Advisor, undertake high-risk explorations.” Center for Strategic & Page 2 International Studies Jonathan C. Hamilton RENEWABLES Partner, White & Case Steelcons Wins Raul Herrera Partner, Solar Contract Corporate & Securities Practice, in Brazil Arnold & Porter Lawmakers accepted Raúl Sendic’s resignation last year amid corruption accusations involving The Brazilian fi rm won the 270 James R. Jones his tenure as head of state oil company ANCAP. // File Photo: midimici2 via Creative Com- Chairman, mons license. megawatt contract, which begins Monarch Global Strategies in 2022, in an April 4 renewable Jorge Kamine An Uruguayan prosecutor in March asked for formal charges electricity auction held by the Counsel, against former Vice President Raúl Sendic, who resigned Electric Energy Trading Center. Skadden Arps Page 3 last year amid corruption accusations stemming from his Craig A. Kelly Q Director, tenure as head of state oil company ANCAP. Sendic denies OIL & GAS Americas Int’l Gov’t Relations, wrongdoing. Prosecutors are also seeking charges against eight other Exxon Mobil senior offi cials at ANCAP and its subsidiaries. Does ANCAP have a cor- Brazil’s Gets New Jeremy Martin Vice President, Energy & Sustainability, ruption problem? What measures are being taken to safeguard against Energy Minister Institute of the Americas future corruption allegations at the energy company? What is the Wellington Moreira Franco was Larry Pascal sworn in Tuesday as Brazil’s new outlook for Uruguay’s energy sector, and what factors are most shaping Chairman, minister of mining and energy. He Americas Practice Group, its future? previously served as secretary of Haynes & Boone the presidency under President Charles Shapiro Michel Temer and as governor of President, David D. Nelson, CEO of Global Business Policy-DC, LLC oil-rich Rio de Janeiro State. World Affairs Council of Atlanta and former U.S. ambassador to Uruguay: “Political leaders Page 2 R. Kirk Sherr President, throughout Latin America are being rocked by scandals, from Clearview Strategy Group A Lava Jato in Brazil to the extensive tentacles of Odebrecht, Mark Thurber which brought down presidents in Brazil and Peru and numerous senior Partner, Andrews Kurth offi cials including the former CEO of Pemex in Mexico—not to mention Alexandra Valderrama the wholesale looting of PDVSA in Venezuela. Even relatively transparent Manager, International Government Affairs, Costa Rica has been rocked by the ‘cementazo’ scandal. The central Chevron theme of this year’s Summit of the Americas is anti-corruption—a re- Lisa Viscidi sponse to the demands of the growing and increasingly empowered mid- Program Director, Inter-American Dialogue dle classes in Latin America. In that context, the case against Raúl Sendic Max Yzaguirre can be viewed as a demonstration of the need for constant vigilance President and CEO, even in a country rated by Transparency International as the least corrupt The Yzaguirre Group in Latin America. The allegations against Sendic and other present and former ANCAP offi cials are ‘small potatoes’ —a few thousand dollars of Moreira Franco // File Photo: Brazil- ian Government. Continued on page 6

OIL AND GAS NEWS said that the terms of the deal is normal for NEWS BRIEFS a new oil play. “Government take is generally Moreira Franco lower in frontier plays than in established areas China’s JinkoSolar as governments need to incentivize companies Supplies Solar Modules Takes Over Brazil’s to undertake high-risk exploration,” the company said, according to the report. Government for Mexico Plant Energy Ministry receipts from the Stabroek oil play, which was Chinese fi rm JinkoSolar has supplied solar discovered in 2015, are expected to reach $700 modules for a 754 megawatt solar park in Mex- Wellington Moreira Franco was sworn in on million by 2020, doubling Guyana’s tax intake. ico, the fi rm said in a press release. According Tuesday as Brazil’s new minister of mining and The Stabroek project will bring to surface just to JinkoSolar, the project will be the largest so- energy, the government announced. Moreira 15 percent of the oil that has been discovered lar PV plant in the Americas. The plant is set to Franco, 73, previously served as secretary of so far. Mineral Resources Minister Raphael become operational in the second half of 2018 the presidency under President Michel Temer Trotman told the news service that, although and supply 1,700 gigawatt-hours of energy. No and as governor of Rio de Janeiro State, as well Guyana would not change the terms of the fi nancial details were disclosed. JinkoSolar has as stints in Brazil’s Chamber of Deputies. His existing deal, the terms for future deals would over 12,000 employees across eight production appointment comes as energy offi cials prepare facilities globally. state-owned electric utility Eletrobras for privatization later this year. Temer announced The Stabroek project will Moreira Franco’s appointment on Sunday, along Argentina’s Genneia Buys with the sudden departure of Deputy Mining bring to surface just 15 and Energy Minister Paulo Pedrosa. Moreira percent of the oil that has Stakes in Solar Farms Franco will replace Fernando Coelho Filho, who been discovered so far. Argentine energy fi rm Genneia has acquired 82 stepped down in order to run for a seat in Bra- megawatts of solar capacity in the province of zil’s Congress, Reuters reported. On Monday, San Juan, EconoJournal reported on Tuesday. Eletrobras CEO Wilson Ferreira Jr. told Reuters The company bought the shares for three solar that Moreira Franco’s appointment would be different. Other international fi rms such parks that are slated to enter the grid by the improve the chances that Congress would as Repsol, Total and Tullow Oil are reportedly end of the year, marking the fi rst time the fi rm approve the privatization of his company. exploring in Guyanese offshore areas. The IMF will develop a site in the San Juan province in According to Ferreira, Moreira Franco’s political report included other recommendations, includ- the Argentine northwest. Genneia, a leading weight improves the chances of privatization ing that Guyana improve its regulatory bodies producer of renewable energy in Argentina, will despite an unclear political environment ahead and introduce a progressive royalty scheme to debate an IPO at this month’s shareholders’ of the country’s October election. Temer’s take in additional revenue from more success- meeting, BAE Negocios reported. government hopes to complete the reforms ful projects. Offi cials in Guyana have been before the vote. working to modernize legal and regulatory mechanisms as oil and gas production ramps up, but analysts have expressed concern that, Ecuador’s Moreno Guyana Has Been Too after decades of “brain drain,” government min- Appoints Fourth Generous With Early istries lack capacity to put in place effective Electricity Minister policies. [Editor’s note: See related Q&A in the Oil Investors: IMF Jan. 24 issue of the daily Advisor.] Carlos Pérez García on April 6 assumed offi ce as Ecuador’s Minister of Electricity and Renewable Energy, the government said. Pérez, The International Monetary Fund has advised a former Minister of Hydrocarbons, takes over Guyanese offi cials in a report that the terms of Petroamazonas for Elsy Parodi Ocaña, who left the ministry last its offshore oil contract are “relatively favor- Opens New Gas- month for undisclosed reasons, Renewables able” to ExxonMobil and recommended that the Now reported. With the appointment, Pérez country rewrite its royalties laws, Bloomberg Fired Power Plant becomes the fourth offi cial to hold the position News reported Monday. According to the under President Lenín Moreno, who was report, the production sharing agreements be- Ecuador’s state-run oil company, Petroamazo- inaugurated in May 2017. Pérez García studied tween Guyana and ExxonMobil “appear to enjoy nas, last week opened a gas-fi red power plant Electronic Engineering at the University of royalty rates well below of what is observed in the Sacha Norte fi eld, El Comercio reported. Texas at Austin and worked at Houston-based internationally.” In a statement, ExxonMobil The power plant is located in Orellana province Halliburton from 1982 to 2015.

COPYRIGHT © 2018, INTER-AMERICAN DIALOGUE PAGE 2 LATIN AMERICA ENERGY ADVISOR April 13, 2018 in the Amazon rainforest. According to Ecuador Inmediato, the plant is just the second of eight that Petroamazonas hopes to construct in the Sacha fi elds by 2020. El Comercio reported Advisor Video that four of the plants will be operational by the end of 2018 and will produce 15 megawatts Unconventional Oil of power altogether, saving the taxpayers $19 & Gas in Argentina million per year. The Ecuadorean government has said that the purpose of the projects is to An Inter-American Dialogue Discussion with reduce imports of diesel into the country, as Fernando Oris de Roa, Argentina’s Ambassador to the well as reduce the environmental impact of United States; Omar Gutierrez, Governor of Neuquén energy production. Petroamazonas CEO Álex Province; and Paola Carvajal, Principal, Arthur D. Little Galárraga has set the goal of completely elimi- nating diesel imports by 2020. Petroamazonas PLAY last month launched a bidding round hoping to attract $800 million from foreign companies to help develop oil and gas reserves. Winners its operations more fl exible, including Decree electricity every year. Canadian Solar said it will operate four oil fi elds in Ecuador’s eastern No. 9041/2017, which has granted Petrobras will develop and build the projects, targeting Amazon region and one natural gas fi eld in more fl exibility for its participation in the commercial operation by 2022. Brazil’s Electric the Gulf of Guayaquil under 10-year shared pre-salt area, as well as new rules designed to Energy Trading Board announced this month profi t and service contracts. [Editor’s note: See enhance transparency in procurement, Larry that wind-power prices fell to the lowest ever related Q&A in last week’s edition of the Energy Pascal of Haynes & Boone told the Energy in Brazil at the April 4 auction, nearly reaching Advisor.] Advisor last month. the Latin American record set in Mexico last November, Bloomberg News reported. Petrobras, BP Sign Steelcons Wins Solar New Memo to Contract in Brazil ContourGlobal Eyes Strengthen Alliance Wind Assets in Brazil Brazilian renewable energy contractor Steelcons has won a contract to supply 270 Power generation company ContourGlobal has Brazilian state-run oil company Petrobras megawatts of solar power capacity, Reuters moved on to potential wind acquisitions in said on Thursday it had signed a memoran- reported last week. The company will install Brazil after abandoning negotiations for buying dum of understanding with Britain’s BP “to the capacity over the next four years. The fi rm two coal-fi red power stations from France’s complement and reaffi rm” a letter of intent won the contract, which begins in 2022, in an Engie, Bloomberg News reported Monday. The the companies signed in October regarding a April 4 renewable electricity auction held by London-based company is looking “closely” at strategic alliance in Brazil, Reuters reported. the Electric Energy Trading Center, or EECC, in wind assets that state-owned Eletrobras plans The companies have agreed to “join forces” in São Paulo. In the auction, the EECC sold the to sell, Alessandra Marinheiro, ContourGlob- areas such as oil exploration and production, right to supply 1,024 megawatts of power to 17 al’s chief executive offi cer for Latin America, oil trading, and other operations. Petrobras and distributors. Solar power had a strong showing told the news service. “There are many M&A BP currently partner in 16 exploration blocks in at the auction, winning 29 of the 39 new opportunities in Brazil,” she said in a telephone Brazil. Moving ahead, the two companies will plants set to be constructed as a result of the interview. “We want to grow in the country and “negotiate investment opportunities in the oil deals. According to O Globo, the auction sold have seen a big consolidation in the market.” and gas chain, in projects in Brazil and abroad, energy at an average price 59 percent below ContourGlobal co-owns two wind projects in for cooperation in upstream, downstream and the established ceiling price for electricity. In Brazil’s northeastern state of Piauí with Eletro- trading activities, among others, on a non-ex- related news, Ontario-based Canadian Solar an- bras’s Chesf unit and is considering taking over clusive basis,” Petrobras said. Saddled with nounced Wednesday that it has won three solar the assets. Eletrobras plans to sell stakes in 70 at least $85 billion in debt, Petrobras faces a photovoltaic projects, totaling 364 megawatt wind farms and transmission lines in a June 7 diffi cult path ahead, Fitch Ratings said in Feb- peak, in Brazil’s April 4 energy auction. Once auction as the company works to reduce costs ruary, when it downgraded the company’s debt connected to the grid, the plants will generate and prepares to be privatized. Brazil’s govern- ratings further into junk territory. In response, approximately 706,000 megawatt hours of ment plans to hold a private auction of the Brazil’s government has adopted rules to make

COPYRIGHT © 2018, INTER-AMERICAN DIALOGUE PAGE 3 LATIN AMERICA ENERGY ADVISOR April 13, 2018 company’s distributors on May 21 and hopes to privatize the entire company by the end of ADVISOR Q&A 2018, according to O Globo. However, plans for privatization of state assets in Brazil could change as presidential campaigns get under- How Does Lula’s Imprisonment way this year. [Editor’s note: See related Q&A in the Sept. 22 edition of the Energy Advisor.] Change Brazil’s Election Outlook?

Former Brazilian President assume offi ce with far greater legitimacy POLITICAL NEWS Luiz Inácio Lula da Silva, who to govern than he would if Lula had been Q has been the front-runner excluded. Yes, Brazil’s judicial system, under in Brazil’s presidential race, either scenario, could be badly damaged. If Ivanka Trump to surrendered to authorities on Saturday to Lula gets on the ballot, many Brazilians will Promote Women’s begin serving his 12-year prison sentence claim a constitutional violation. If his can- after being convicted on corruption charges didacy is denied, the election will be viewed Empowerment at and losing on appeal. Meantime, deeply as rigged and the court seen as biased unpopular President Michel Temer fl oated against Lula. For some, Lula’s arrest will Summit in Lima the idea that he may run again, while his demonstrate respect for the law; for others, fi nance minister, Henrique Meirelles, has it is an unjust power grab by Brazil’s elite. Senior White House advisor Ivanka Trump told also reportedly been considering a run for Lula would probably win if he competes. reporters Wednesday she plans to promote president as the candidate of the ruling Bra- Many analysts disagree, arguing that his women’s economic empowerment and fe- zilian Democratic Movement Party. Will the disapproval rating is just too high. But most male-owned businesses during the Summit of imprisonment of the still-popular Lula lead other possible candidates have similar dis- the Americas this week in Lima, the Associated Brazilians to question the race’s legitimacy? approval numbers. If Lula is disqualifi ed, the Press reported. “When women are empowered Which candidate has the edge ahead of Bra- election is up for grabs. The best guess is economically, it contributes to increased eco- zil’s October presidential election? To what that a centrist candidate, probably São Paulo nomic growth, peace and global stability,” she can right-wing candidate Jair Bolsonaro, Governor Alckmin, will come out ahead. said. The daughter of U.S. President Donald who has been running behind Lula in the Other center-right politicians, including Pres- Trump, Ivanka Trump is scheduled to join the polls, attribute his support? Which factors ident Temer, are poised to run, but none of delegation led by Vice President Mike Pence. between now and October have the most them has yet generated more than minimal Among her stops will be a visit to Lima’s potential to affect the race? support. Still, the centrist political parties stock exchange to meet with women business are the best organized, are able to mount leaders and entrepreneurs. The president Peter Hakim, president national campaigns and will be allotted the pulled out of the two-day summit, which starts emeritus of the Inter-American most television time. The candidate of the tomorrow, only earlier this week, saying he Dialogue: ”The Supreme Court extreme right, nationalist Jair Bolsonaro, is needed to oversee potential U.S. military action A decision allowing Lula’s impris- second to Lula in polls, but is probably un- in Syria instead. The decision marks the fi rst onment was justifi ed by the facts and the electable. His party is small, and his access time a U.S. president has not attended the law. But allowing Lula to remain free would to television will be limited. And he is hardly summit, which President Bill Clinton started in have been equally justifi able. Lula’s pros- an outsider having served 20 years in Brazil’s 1994. U.S. Sen. Marco Rubio (R-Fla.), who ran pects for contesting October’s presidential deeply unpopular Congress. With so many unsuccessfully against Trump for the Republi- election have plummeted, but they are not other possible candidates, all with meager can Party’s nomination for president in 2016, yet zero. His chances depend on his keeping poll numbers, predicting the election results told reporters on Tuesday he plans to attend, his supporters mobilized and sustaining his is simply impossible.” McClatchy reported. Others en route from the sizable lead in the polls, and who might be United States include Acting Secretary of State president if he cannot run. Lula should be on John Sullivan; newly confi rmed Permanent the ballot because it would be best for Bra- EDITOR’S NOTE: More commentary on Representative to the Organization of Amer- zil’s democracy; however, as a candidate, he this topic appeared in the Q&A in Tuesday’s ican States Carlos Trujillo; as well as Acting would be subject to intense scrutiny about issue of the daily Latin America Advisor. Assistant Secretary for the Bureau of West- his conviction on corruption charges. If Lula ern Hemisphere Affairs Francisco Palmieri. were to lose the election, the winner would Pre-summit events have been taking place throughout the week.

NEWS BRIEFS States to sign an accord before U.S. Trade Pro- At Least 21 Killed in motion Authority expires, Guajardo said. The Venezuela’s Maduro Attempted Prison TPA gives the U.S. president the authority to Says He’ll Skip Summit sign trade agreements and send them to Con- Breakout in Brazil gress without the possibility of amendment, so Venezuelan President Nicolás Maduro on long as Congress is consulted in the negotia- Tuesday said he will not attend the Summit of tion process. The current TPA agreement is set At least 21 people were killed Tuesday when the Americas in Lima this week, El Comercio to expire on July 1, though the administration gunmen attacked a prison in northern Brazil reported. The announcement came just hours of U.S. President Donald Trump requested an in an effort to aid inmates in an attempted after the White House announced that U.S. extension in late March. The news comes as a mass escape, Folha de S.Paulo reported. President Donald Trump was skipping the surprising turn after Trump, who campaigned Fifteen of those killed in the ensuing gun battle summit in order to monitor the U.S. response on promises to renegotiate trade deals, with police at the Santa Izabel Penitentiary to the alleged use of chemical weapons in threatened to pull out of the agreement just were prisoners, and fi ve of those killed were Syria. Peru had earlier disinvited Maduro over last week over border security issues. In the assailants, the newspaper reported. A guard at human rights violations and his handling of interview, Guajardo the U.S. proposal that car the prison, which is located in Pará State, was the humanitarian crisis in the country. Maduro manufacturers in Mexico work in special wage also killed. The incident began when explosives called the meeting “a waste of time” aimed at zones, where workers would earn $15 per hour, were placed next to a prison wall, according to “the economic colonization of the region.” “unreachable for Mexico in the short term.” the state’s public security secretariat. Police Still, he said that the teams were in ”permanent and guards then engaged in a gunfi ght with talks” in Washington. [Editor’s note: See Q&A armed men who were trying to help inmates to on the NAFTA renegotiations in the Feb. 13 Brazilian Lawyers’ escape. Authorities seized two assault weap- issue of the Advisor.] Association Seeks ons, three pistols and two other guns from the Injunction to Free Lula assailants who tried to enter the prison in order to free inmates, police investigator Rodrigo Drought in Argentina An association of Brazilian lawyers on Monday Leão told The New York Times. Late Tuesday, requested an injunction from the country’s Su- prison guards were conducting a headcount Cuts Deep Into Soy, preme Court that would free former President inside the prison to determine if any inmates Luiz Inácio Lula da Silva from custody, Reuters had escaped. Cattle Production reported. The request, fi led to Supreme Court Justice Marco Aurelio Mello, asks for the free- Suffering their worst drought in years, Argen- ing of anyone who, like Lula, is jailed but has ECONOMIC NEWS tine soybean processors have turned to the not yet brought their appeal before the coun- United States for supply, purchasing the largest try’s top appeals court. Lula turned himself in amount in 20 years in order to make up for on Saturday to begin serving a 12-year prison Mexican Economy the expected shortfall later this year, Reuters sentence following his corruption conviction. Minister Hopeful for reported. The drought has prompted crushers He is continuing to appeal. in Argentina to buy up some 240,000 metric NAFTA Deal by May tons of U.S. soybeans over the past two days. In recent years, Argentina has been a major soybean exporter to countries around the Mexican Economy Minister Ildefonso Guajar- Mexico Probes Firms Tied world. But the U.S. Department of Agriculture do said on Monday that there is “a very high to Cambridge Analytica this week lowered its estimate for Argenti- probability” that the signatories of the North na’s soybean crop by 7 million metric tons to Mexico’s data protection authority, known as American Free Trade Agreement, or NAFTA, will 40 million metric tons because of reduced INAI, on Monday said it is investigating wheth- reach an agreement by the fi rst week of May, harvested area and yield. A wave of hot, dry er fi rms linked to British data fi rm Cambridge El Universal reported. Guajardo told Mexico’s weather since November has cut 40 percent off Analytica violated Mexican law, Reuters report- Televisa network in an interview that, although overall grains production, the Associated Press ed. The investigation centers on the applica- he doubts the parties will reach a deal during reported. Argentina’s herd will shrink by up to tion Pig.gi, which recently severed ties with the the current round of negotiations in Washing- 1 million head of cattle next year as ranchers British fi rm accused of processing Facebook ton, there is an “80 percent” chance that an decide to slaughter females rather than grow users’ data without their consent, according to agreement will be made within 30 days. This their herds, according to the report. Meanwhile, the wire service. Offi cials in Colombia blocked timetable is crucial to the U.S. delegation, as in neighboring Brazil, northern regions of the the app on March 28, pending an investigation. any further delay would not allow the United country have received above average rainfall.

FEATURED Q&A / Continued from page 1 LATIN AMERICA ENERGY ADVISOR is published weekly by the Inter-American Dialogue Copyright © 2018 alleged misuse of corporate credit cards to The lack of transparency and the ineffi cien- cover personal expenses. Perhaps the most cies in public administration are worrisome. Erik Brand interesting case involves allegations against There is no legal certainty, and transparency Publisher [email protected] one of the other offi cials related to transac- and macroeconomic stability are at risk.” tions involving PDVSA debt—demonstrating Gene Kuleta Editor that when you play with matches you are Enrique Puricelli, independent [email protected] likely to get burned. The ‘zero tolerance’ Buenos Aires-based manage- for offi cial corruption, even of a relatively ment consultant: “To under- minor nature, is a positive symbol for the stand why the general public A Michael Shifter, President country and the region. Energy investors in perceives ANCAP’s senior management to Genaro Arriagada, Nonresident Senior Fellow Uruguay, including those in the promising be corrupt, one must take into account that Sergio Bitar, Nonresident Senior Fellow shale opportunities in the ‘Norte’ basin and the company is a state-owned monopoly; the Joan Caivano, Director, Special Projects the offshore blocks available for exploration, prices charged for the products it delivers Michael Camilleri, Director, Peter D. Bell Rule of can focus on the geology, the ‘below ground’ are the highest in the region and have little Law Program risks, rather than the ‘above ground’ risk of to do with market realities, the price of crude Kevin Casas-Zamora, Nonresident Senior Fellow corrupt demands by government offi cials.” oil or allowing the Uruguayan economy to be Ariel Fiszbein, Director, Education Program competitive. In 2016, the government was Alejandro Ganimian, Nonresident Fellow Sergio Abreu, president of the forced to re-capitalize ANCAP with $850 Peter Hakim, President Emeritus Uruguayan Council for Foreign million, an exceedingly large sum for a small Claudio Loser, Senior Fellow Affairs and former senator and economy and a large burden on its already Nora Lustig, Nonresident Senior Fellow minister of foreign affairs of overtaxed population. Mr. Sendic’s image Margaret Myers, Director, China and A Latin America Program Uruguay: “Vice President Sendic lied about and credibility, seriously tarnished by this Manuel Orozco, Director, Migration his academic degree. While he headed the inexplicable affair, received another blow Remittances & Development National Administration of Fuels, Alcohol, when it was discovered that a university Jeffrey Puryear, Senior Fellow and Portland (ANCAP), he created dozens of Tamar Solnik, Director, Finance & Administration corporations that are not supervised by the Lisa Viscidi, Director, Energy Program Court of Auditors. During his administration, Denisse Yanovich, Director, Development and External Relations ANCAP’s losses amounted to around $1 The ruling Frente billion. Sendic spent thousands of dollars Amplio party has very ably covered its tracks Latin America Energy Advisor is published using an ANCAP corporate credit card and weekly, with the exception of some major was forced to resign. The attorney general in previous scandals.” U.S. holidays, by the Inter-American Dialogue requested his prosecution and that of other 1155 15th Street NW, Suite 800 — Enrique Puricelli Washington, DC 20005 Phone: 202-822-9002 directors and managers as well, on several www.thedialogue.org charges. The former economy minister and ISSN 2163-7962 the former president of Banco de la Repúbli- ca during the Mujica administration were degree in human genetics, which he always Subscription Inquiries are welcomed at [email protected] prosecuted in connection with a scandal maintained to have obtained at the Universi- The opinions expressed by the members of the Board of at an airline, which also involved ANCAP. ty of Havana, did not exist. Whether anything Advisors and by guest commentators do not necessarily President Vázquez declared that Sendic has will come of this is doubtful, since histori- represent those of the publisher. The analysis is the sole suffered from bullying and that his party, cally the ruling Frente Amplio party has very view of each commentator and does not necessarily represent the views of their respective employers or Frente Amplio, supports him. Mujica claims ably covered its tracks in previous scandals, fi rms. The information in this report has been obtained that political decisions are above the law. and a popular perception in the region is that from reliable sources, but neither its accuracy and completeness, nor the opinions based thereon, are This is a populist government that appears the left can do no wrong. However, Uruguay’s guaranteed. If you have any questions relating to the capitalist in the way it collects taxes and energy situation is looking positive due to contents of this publication, contact the editorial offi ces of the Inter-American Dialogue. Contents of this report socialist in its out-of-control spending. This heavy investments in renewable resources, may not be reproduced, stored in a retrieval system, has resulted in a fi scal defi cit of almost 4 mainly wind farms, which, combined with or transmitted without prior written permission from the publisher. percent, a tax burden above 30 percent of hydraulic generation, make the country less GDP, an unemployment rate of 8 percent and vulnerable to international oil prices. This the highest foreign debt in Uruguay’s history. trend is expected to continue in the future.”